In a substantial display of bilateral cooperation, the Government of India (GoI) has greenlit 61 Project Tied Assistance (PTA) initiatives under Bhutan’s 13th Five-Year Plan. Finance Minister Lekey Dorji announced this development to the National Assembly on Monday, highlighting the first tranche of funding amounting to Nu 49.58 billion.
Since July, Bhutan has already received Nu 1.8 billion from the total PTA allocation of Nu 1,796.46 million, with expectations of additional disbursements in the upcoming months. Minister Dorji also revealed that the GoI has pledged a programme grant of Nu 5 billion, reinforcing India’s commitment to Bhutan’s economic growth.
Under the current agreement, Bhutan is set to receive Nu 250 million every quarter. The initial payments for July, August, and September have already been disbursed, ensuring a steady flow of funds to support various development projects across the country.
The announcement came in response to an inquiry from Rinchen Wangdi, Member of Parliament for the Bartsham-Shongphu Constituency in Trashigang. MP Wangdi sought detailed information on the PTA funds received to date and the number of projects sanctioned. Additionally, he raised questions regarding the Small Development Projects (SDP) grants from India.
Addressing the SDP queries, Minister Dorji acknowledged minor delays in fund disbursement but remained optimistic about the timely arrival of pending funds. Out of the total Nu 10 billion allocated for SDP, Nu 7 billion is designated for gewogs (local administrative units), with Nu 1.5 billion each allocated for thromdes (municipalities) and dzongkhags (districts). To date, 279 SDP projects have been approved in collaboration with local MPs and authorities. For the first tranche covering 2024-2026, Bhutan has sought approval from India for an additional Nu 4.2 billion, with expectations of commencement by December this year.
Minister Dorji also provided insights into financial contributions from other development partners. Between July and October 2024, Bhutan secured Nu 2.19 billion from various international collaborators, supplementing the GoI’s support.
The 13th Five-Year Plan outlines a total budget of Nu 512 billion, partitioned into Nu 267 billion for recurrent activities and Nu 245 billion for capital works. In alignment with Article 14(6) of the Bhutanese Constitution, all recurrent expenditures are to be funded through domestic revenues, projected at Nu 331 billion. This strategy is expected to generate a surplus of Nu 64 billion, earmarked for financing capital projects.
India’s commitment to Bhutan’s capital budget is substantial, totaling Nu 100 billion. This includes Nu 70 billion allocated for PTA projects, Nu 10 billion for SDP, Nu 5 billion in programme grants, and Nu 15 billion designated for the Economic Stimulus Plan. Additionally, Bhutan anticipates receiving Nu 40 billion in capital funding from other international development partners, further bolstering the nation’s infrastructure and development initiatives.
Minister Dorji concluded his remarks by expressing confidence in the continued support from India and other partners, emphasizing the positive impact of these funds on Bhutan’s socio-economic landscape. “We are hopeful that the GoI will approve the remaining funds and start work on these projects by December this year,” he stated, underscoring the government’s commitment to timely project implementation.
The robust financial support from India, coupled with contributions from other development partners, positions Bhutan on a promising path towards achieving its development goals outlined in the 13th Plan. As funds continue to flow in, stakeholders remain optimistic about the transformative projects set to enhance Bhutan’s infrastructure, economic stability, and overall quality of life for its citizens.
